Global equity markets continued to gain strength in the third quarter off their Brexit lows back in late June, shrugging off worries about the impact of negative interest rates, anemic global growth, currency volatility, and pre-election jitters. Despite continuing to carry above-average cash reserves, the Tweedy, Browne Funds also produced solid absolute returns in this buoyant environment, and three out of our four Funds are besting their benchmark indices year-to-date.
Leading the advance during the quarter were the Funds’ financial, technology and industrial holdings, including strong returns from companies such as HSBC (NYSE:HSBC), Standard Chartered (SCB), National Bank of Canada (TSX:NA), CNP Assurances, Munich Re, Zurich Insurance, Cisco, Alphabet (Google), IBM, Siemens, Safran, and Linde, which announced that it was in discussions to combine with Praxair, a merger that would create the world’s largest supplier of industrial gas. As we write, the prospective merger appears to be off, and it remains to be seen if the two companies will re-engage. The Funds’ portfolios also benefitted from their overweighting in UK-based companies, which rallied aggressively off their Brexit lows, catalyzed in part by the collapse of the British Pound. We also had a nice bounce in G4S, and continued strong results in ABB, Teleperformance, and the Daily Mail. Continue Reading »